Personal Finance Crash Course for New Graduates; Texas CPAs Dispel Common Money Myths
DALLAS, May 26 -- As scores of Texas high school seniors graduate this month, theyíll likely head off to college or the workforce. Texas CPAs have some real-world financial myth busters and an online quiz at http://www.ValueYourMoney.org for newly-minted high school graduates looking to start a life on their own.
Myth 1: Developing a spending plan means an all-Ramen noodle diet.
Outlining a spending plan doesnít have to be a chore. Itís about choices. If you must fill up the gas tank for a trip home for dadís lasagna, momís laundry service and a night in your old bedroom, you might not be able to spring for three-meat thick- crust pizzas, no anchovies, during a late-night dorm floor fest. The trick is to know how much money you have, what you need to buy and when you need to buy it. As youíre budgeting, remember to include ATM fees, parking meter money, vending machine change, and other miscellaneous expenses. Little items can add up.
Myth 2: Identity theft wonít happen on campus.
College living can often involve close quarters, whether it be a residence hall, fraternity house or apartment roommates. With this proximity and accessibility in mind, keep your personal financial information out of potentially unscrupulous hands. That means keeping track of credit card receipts and statements, as well as checkbooks, personal identification numbers (PINs) and other banking information. To prevent against identity theft, Texas CPAs recommend purchasing a cross-cut shredder to destroy all credit card applications received in the mail or on campus, reconciling checking accounts and reviewing credit card statements at least once a month. Also, safeguard your Social Security number. Choose alternate numbers for campus identification and grade posting.
Myth 3: Credit scores wonít affect me until Iím much older.
While itís true you might not purchase a home until youíre older, credit scores come into play for apartment rentals, loan interest rates and even on job searches. These days, many employers check credit scores of potential new employees during the hiring process. And you canít cram for a good credit score. Texas CPAs say in order to maintain a good credit rating, pay your bills on time and donít overextend yourself credit-wise.
Myth 4: Iíll only use my credit cards for emergencies.
Do you consider a 2 a.m. study break bean burrito craving an emergency? Different people define emergencies differently. For some, itís a new tire to replace a blown-out one. For others, itís a new outfit to wear on an important occasion. If you have easy access to credit, you may be tempted to spend more than you can pay off each month. While credit cards can be helpful in true emergency situations and allow you to begin establishing a credit history, Texas CPAs caution new high school graduates to tread carefully when using credit. You donít want that burrito to cost as much as a steak after months and months of finance charges come into play.
Myth 5: Iím not majoring in business, so I donít need to learn about finances.
Even underwater basket weavers need to learn to manage their personal finances. Just because your field of study might not involve theories surrounding microeconomics, you should be well- versed on practical saving and investing principles for your personal use. After all, why study and work hard to make bigger bucks if you canít manage those bucks to make more bucks? With its statewide financial literacy effort, Texas CPAs urge consumers of all ages to become proficient in personal finance matters. It might not be a formal college course, but by reading, attending community workshops and seeking professional advice, new high school graduates should access the information needed to make the most of their money.
The online quiz for high school graduates and other money management tips are available on http://www.ValueYourMoney.org. The Web site features special sections for kids, youth, young adults, adults, and military personnel. Selected sections are available in Spanish. While online, consumers may register for a free monthly electronic newsletter with articles on saving for retirement, identity theft protection, budgeting, tax planning, and more.
TSCPA (http://www.tscpa.org) is a nonprofit, voluntary, professional organization representing Texas CPAs. The society has 20 local chapters statewide and has 27,000 members, one of the largest in-state memberships of any state CPA society in the United States. TSCPA is committed to serving the public interest with programs that advance the highest standards of ethics and practice within the CPA profession.
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